The average public service salary now exceeds NZD100,000. By comparison, the average private sector salary is about NZD80,000. But it’s the salaries at the top of the public service pyramid that are truly remarkable.
The mentality behind New Zealand’s mental approach to its public service is the inappropriate application of corporate principles, including levels of remuneration and nomenclature, to public servants. New Zealand’s discredited Solicitor-General Una Jagose is paid over NZD800,000 p.a. (not including lavish perks) and is described on Crown Law’s website as its “Chief Executive”. The public service talks as if it’s running profit-driven businesses, whereas it’s mainly just blowing the tax take.
The chief villains in this lavish lunacy have been New Zealand’s more recent Public Service Commissioners. Under the Public Service Act 2020, the Public Service Commissioner’s functions include to “act as the employer of public service chief executives, including by…appointing chief executives and reviewing their performance”.
New Zealand’s most recent permanent Public Service Commissioner has been Mr Peter Hughes, who was Public Service Commissioner from 2016 until earlier this year.
Hughes’ special gift to our once plucky little nation was to overlay senior public servants’ statutory roles with corporate-style employment contracts. These grandiose contracts artificially augment the security of public servant tenures and empower them to always chisel for more - even when their time should be well and truly up.
Our next Public Service Commissioner will be Sir Brian Roche. Sir Brian is a career sponger from the public pond and inveterate defender of exorbitant public service remuneration. In the 1990s he was the Crown’s chief negotiator on Treaty of Waitangi claims, including the Ngai Tahu settlement. In 2009, as chairman of the New Zealand Transport Agency (Waka Kotahi), Sir Brian defended the salary of NZ Transport Agency CEO Geoff Dangerfield ($570,000 p.a.). Although Geoff isn’t as funny as American comedian Rodney Dangerfield, his succumbing to neighbourhood temptations was both funnies - haha and peculiar.
Irrepressible Coster
Let’s take, as just one example of what Hughes got up to as Public Service Commissioner, Police Commissioner Andrew Coster. Under the Policing Act 2008 (NZ):
New Zealand’s most recent permanent Public Service Commissioner has been Mr Peter Hughes, who was Public Service Commissioner from 2016 until earlier this year.
Hughes’ special gift to our once plucky little nation was to overlay senior public servants’ statutory roles with corporate-style employment contracts. These grandiose contracts artificially augment the security of public servant tenures and empower them to always chisel for more - even when their time should be well and truly up.
Our next Public Service Commissioner will be Sir Brian Roche. Sir Brian is a career sponger from the public pond and inveterate defender of exorbitant public service remuneration. In the 1990s he was the Crown’s chief negotiator on Treaty of Waitangi claims, including the Ngai Tahu settlement. In 2009, as chairman of the New Zealand Transport Agency (Waka Kotahi), Sir Brian defended the salary of NZ Transport Agency CEO Geoff Dangerfield ($570,000 p.a.). Although Geoff isn’t as funny as American comedian Rodney Dangerfield, his succumbing to neighbourhood temptations was both funnies - haha and peculiar.
Irrepressible Coster
Let’s take, as just one example of what Hughes got up to as Public Service Commissioner, Police Commissioner Andrew Coster. Under the Policing Act 2008 (NZ):
* The Police Commissioner (Coster) “holds office at the pleasure of the Governor-General”, which means that the Commissioner should hold the job only for such time as the incumbent Government wants him (or her) to do the job, and must simply leave the job if that’s what the Government wants
* The Public Service Commissioner (Hughes, when Coster was appointed in 2020)… “is responsible for managing the process for the appointment of the [Police] Commissioner”
But Hughes bestowed upon Cozy Coster a contract so cushy that it prevented the current Government from simply giving him the brusheroo, as contemplated by the Policing Act. Instead, in order to rid us of Coster, the Government has had to appoint him (no doubt against its better judgement and true wishes) to head of the Government’s new “Social Investment Agency”. (No doubt Coster also knows where bodies are buried and is milking that too.)
The Mercurial Mr McKenzie
A certain Andrew McKenzie could be the highwater mark of where corporatization of the public “service” has taken New Zealand. I went through Victoria University of Wellington (not “Te Herenga Waka”) with Andrew. He got his beanie (accounting) degree from that university. I played rugby with Andrew. He was a gifted ball player who could never quite manage to be in the right place, at the right time, to make the tackle.
After doing his bit to wreck Fletcher Building as its head accountant (“chief financial officer”), Andrew landed his plum gig as the “chief execute officer” of Housing New Zealand/Kāinga Ora–Homes and Communities in September 2016. Andrew’s annual remuneration for the 2023/24 year was $731,000. When Sir Bill English’s review of Kāinga Ora’s performance correctly found its performance to have been parlous under McKenzie’s stewardship, McKenzie resigned, publicly claiming the Government’s attempts to fix Kāinga Ora are “not what [he] signed up for”. But Andrew still managed to wring a “redundancy” of about $350,000 (that’s around $1,000 for each day of our Gregorian calendar) from Kāinga Ora.
According to Kāinga Ora’s latest annual report, “Andrew McKenzie the former chief executive resigned. He will receive his contractual entitlements including a payment of approximately $352,000 as compensation for notice and redundancy which is in accordance with the agreement in place for the Chief Executive”. For novices in employment law, resignation and redundancy are mutually exclusive. But apparently not at Kāinga Ora. Who else gets paid for quitting? In the rarified air of Aotearoa’s senior public service, our money is frittered away like confetti.
Incoming chairman of Kāinga Ora, Simon Moutter, lied when he publicly described McKenzie as having done an "excellent job" over the last eight years.
Who’s paid what?
It’s us common people who, with our taxes, are paying our overblow and over-remunerated elite public servants. But despite us funding their excesses, it’s still terribly tricky to find out precisely how much public servant chief executives are being paid. Annual reports typically disclose remuneration in anonymized bands.
New Zealand’s highest paid public servant appears to be the New Zealand Superannuation Fund CEO, Jo Townsend. Her predecessor as NZ Super Fund CEO, Matt Whineray, was remunerated to the tune of about NZD1.4m for the year ended 30 June 2023. NZ Super Fund was the first public trough that current Reserve Bank Governor Adrian Orr got to stick his insatiable snout into.
Attempts to use the Official Information Act to obtain details of chief executives’ pay are typically rebuffed on spurious grounds of “confidentiality”. And appeals to fruity Government Ombudsman, Peter Boshier (pay…comfortably North of NZD 0.5m), are fruitless. Peter is naturally a close friend of the other Peter, Peter Hughes - orchestrator of the profligacy.
What’s the solution?
What can we do about all this corporatist ideological capture of our public service, with all its arrogant wastefulness? And about corporate capture of our Government itself – who could forget the nauseous sycophancy of the ousted Labour Government towards Black Rock, and all the claptrap that went with the completely bogus NZD2b “climate infrastructure fund”?
To my plodding mind, the answer to corporatism is populism. We ordinary people must steadfastly refuse to accept that the public servant elites are necessarily any better or more able than the rest of us, or remotely deserving of what they pay themselves. We must rail against the nonsense, petition our politicians, rant and rave, relentlessly expose these mendacious mandarins.
In tribute to popular culture, let us sign off – dear readers - with a tribute to Henry John Deutschendorf Jr. (otherwise known as John Denver)…to the tune, of course, of Grandma’s Featherbed
Gov’ment’s Featherbed
It’s wine all day and six figure pay
Aloof is our Servants’ Schtick
They get paid from the efforts of all they get to fleece
Take a whole lot of cash from us pricks
They’re all prat kids and poor hound dogs
They’re just piggies that steal from the shed
They get lots of sleep, and they have a lot of fun
On Gov’ment’s Featherbed
John McLean is a citizen typist and enthusiastic amateur who blogs at John's Substack where this article was sourced.
4 comments:
The top- heavy and now sinking NZ can easily be explained .......
I think the most accurate part of this misguided view of management and its remuneration in the Public Sector is 'to my plodding mind'. One undoes any possibility of being taken seriously by playing the man and not the ball, as has been done here. I think in comparison to private sector CEOs, public sector chiefs are underpaid. What is wrong is that they are inhibited from choosing and firing their subordinates, so that they end up with limited capacity to affect an organisation's performance, as was so amply demonstrated by the problems the DG of Health, Ashley Bloomfield, had with a Department doing things he said it wasn't doing. Take away the extraordinary difficulties any public sector manager has in removing an under-performing subordinate manager and the operations of the public sector would be substantially improved. Their current workaround is to fail to honest about their performance as a referee when the subpar manager is nudged towards another job to hamper his/her next employer.
In the late 50's, 60's and 70's, government and to a certain extent, local body, service utilised a "trade off" employment regime. Your role, some would say sinecure in those days, came with a security of tenure and the trade off was remuneration (no packages in those days) considerably lower than the private enterprise levels of the day.
Excellent column John M, and comment John P. Another snout in the public trough that's finally been terminated, but which rightly deserves special mention after some eight years of abysmal outcomes, not to mention the ruination of the futures of many of our young, is none other than, Iona Holsted - the former Secretary of Education. What's the bet, to add further insult to injury, she'll be on a future honours list?
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